Decentraland [MANA] halted at psychological $1 mark as it sees a short-term range formation

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

On the lower timeframes, Bitcoin [BTC] has held the $23.5-$23.7k area as support over the past couple of days. Heading into the weekend and potentially low liquidity, BTC bulls could begin to worry that the king might slip back beneath the $23k mark. This could see Decentraland pullback as well. MANA was trading within a range over the past two weeks, and approached the range highs at $1.02. The $1 mark would also likely oppose further gains in the coming days.

MANA- 1-Hour Chart

Source: MANA/USDT on TradingView

The $1 was a psychologically important level. Market participants would likely flip bullish if the $1 was retested as support, and not just for technical reasons. It so happened that the $1 mark also had confluence with a range MANA has traded within since mid-July. This range extended from $0.84 to $1.02, with the mid-range value at $0.93. This level can be expected to serve as support should MANA venture southward.

If Bitcoin can climb back above the $24.5k mark, it could encourage the Decentraland token to climb sharply as well. The bullish momentum would be witnessed across the altcoin market. To the south, apart from $0.93, there was also a small demand zone at $0.96-$0.95.

Rationale

Source: MANA/USDT on TradingView

The hourly Relative Strength Index (RSI) just barely managed to hold on to the neutral 50 level over the course of the previous day, with a brief dip to the 42 mark. The RSI climbed back above neutral 50 in recent hours to hint at bullish momentum. The A/D line has also risen over the past couple of days.

The boost to the A/D indicator highlighted buying volume in recent days. The price also continued to trade above the EMA ribbon, which suggested that bullish momentum has not died yet.

The Bollinger Band (BB) width indicator has bobbed and weaved in recent weeks. The surges indicated a sudden rise in volatility. Yet, MANA was unable to break above or below the range. If MANA managed to climb past the $1 mark and the BB bandwidth indicator finds a bottom near 0.05 again, a short-term investor might want to explore buying opportunities.

Conclusion

Despite the bullish momentum and the presence of strong buyers, the $1 mark remained significant resistance. Earlier buys of MANA can take profit at this psychological resistance level. A buying opportunity might arise if bulls flipped this level to support.